Business Promotion

Lecture Schedule
At the end of the module the participant will be able to
understand

• B-B Advertisement
• Trade Shows
• Personal Selling
• Sales Force management
• Territory and Quota Management
• Recruitment, selection and Training of Sales Force
• Motivating compensating and Evaluating Sales Force
• Key Account Management
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AIMS
 Business Promotion
Communication by the firm with its various
audiences, with a view to informing and
influencing them.
• Advertisements
• Personal selling
• Sales Promotion
• PR

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 Advertising
• “Advertising is a paid non personal
communication from an identified sponsor
using mass media to persuade or influence an
audience”
• Advertising promotes ideas, goods and
services of identified sponsors.
• Principles remains the same, Practices varies
in international market

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 Advertising
• The paid aspect of this definition reflects
the fact that the space or time for an
advertising message must be bought.

• The non-personal component means that

advertising involves mass media (eg. TV,
radio, magazines, newspapers) that can
transmit a message to large groups of
individuals, often at the same time.
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 Advertising
• The non-personal nature of advertising
means that there is generally no opportunity
for immediate feedback from the message
recipient (except in direct response advertising)

• Therefore before the message is sent, the

advertiser must consider how the audience
will interpret and respond to the message

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 Why Advertisement

• Inform people about their products and services.

• To make their brand names familiar to the public.
• To give the company a “personality” which sets it
apart from the others.

• To remind customers about their brands at the

right time and right place
• To tell the public about improvements in products

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Avis v/s Hertz (Rent-a-car)

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 The Role
• Integrated communication
• Sales Effectiveness
• Enhancing reputation of the supplier.
• Increased brand awareness
• Increased sales efficiency
• Interactivity
“The study says the buyers who had been exposed to supplier’s ads rated
supplier’s sales personnel substantially higher on product knowledge,
service and enthusiasm”
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 Limitations
• Integration of communication
• Cost
• Carefully targeting the buying influential.

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B-B Ad – The Process
Ad mission Directly flows from
Set Ad Objectives Marketing strategy, Written
and target market objectives, Target Audience, Creative
Strategy statement

Determining the % of Sales Method

Ad Budget Objective – Task Method
Passing the threshold

Develop the Attention and Interpretation

message FAB Analysis, understanding buying
motives
Horizontal Publications and Vertical
Select the media Publications, Direct mailers,
circulation, Frequency of Ad, Online
Ads, Specific T V channels/Program

Evaluate ad
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effectiveness AIMS
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 Measuring Advt. Effectiveness
• Assessing ad’s impact on what “intervenes” b/w
the stimulus and the resulting behavior.
• Measure the Ability to move an individual
through the purchase decision process.
• Measure the Indirect communication effect of
ads
• Pre and Post evaluation.
• Judged on cost per level of achievement analysis.

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 Areas of Evaluation
Target Market defined target market .
• Degree to which Ads succeeded in reaching
Coverage
Key Buying • Factors that triggered purchase decision.
Motives
Effectiveness of key buying influential's in defined market.
• Degree to which the message registered with
Messages
Media • Degree to which various media were
Effectiveness successful in reaching defined market.

• Degree to which ads accomplished its defined

Overall Results objectives.
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 Trade Shows
• An effective selling message can be delivered
to the large and interested target audience
• New product introduction to mass
• Hands on experience – one to one interaction
• Potential customers can be identified
• Brand management
• Assess Net Buying Plans, Total Buying plans
and lead efficiency
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 Personal Selling
• Personal selling: Interpersonal influence
process involving a promotional presentation
conducted on a One-to-One basis with the
buyer.
The process of:
• Developing customer relationships,
discovering customer needs, matching
appropriate products with these needs, and
communicating benefits.”
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 Personal Selling
• It’s the exchange process from Selling centre
to Organizational Buying centre.
• The exchange process involves information,
Problem solving, negotiation,
Products/services, Payment, After sales
service

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 Personal Selling Unique role
• 1. High level of customer attention
• 2. Customize the message
• 3. Yields immediate feedback
• 4. Communicate more technical and complex
information
• 5. Demonstrate a product’s functioning and
characteristics
• 6. Develop long-term relationship
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 Sales Process
Lead Generation
Lead Qualification
Bid and Proposal
Sales Presentation
Negotiation and Sales Closure
Fulfillment
Customer care and support
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 Sales Force Management

Setting Organizing
objectives Planning Organizing activities

Recruit,
Motivate, select, train,
evaluate, develop,
& control manage, &
Controlling Directing
motivate
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 Types of B-B Selling
(Organizing Personal selling efforts)

Geographical Organization

Product Organization

Market Centered Organization

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 Sales Management

• “Sales Management means –

The planning, direction, and control of

personal selling, including recruitment,
selecting, equipping, assigning, routing,
supervising, paying and motivating as these
tasks apply to personal sales force.”
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Sales Territory and Quota Management

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 Sales Territory

• A group of present and potential customers

assigned to an individual.
• Sales person, a group of sales person, a
branch, a dealer, a distributor or a
marketing organization at a given period of
time.
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 Advantages
It ensures better market coverage
Effective utilization of the sales force
Efficient distribution of workload among sales
people
 It is convenient to evaluate the performance of
sales people
 To control over the direct and indirect costs of
the sales function
 Optimum utilization of sales time by sales people

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 Advantages
• Prompt and efficient after sales service
• Grievance redressal
• Familiarity
• Transparent system
• Optimum size of territory
• Avoiding duplication of efforts

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Designing Sales Territories - Factors
• Nature and demand of the product
• Mode of physical distribution
• Selling process
• Transport and communication facilities
• Govt.Regulations
• Population density and spread
• Market potential and growth rate
• Shelf life of the product

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 ASSIGNING TO TERRRITORIES
• Straight line Pattern
• Clover Leaf pattern
• Major City Pattern

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 Straight line Pattern

BASE First Call

C C

C C

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 CLOVER LEAF PATTERN

C C

BASE
C

C
C C

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MAJOR CITY PATTERN

2 3

4 5

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Wedge shaped (Density pattern)

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 Sales Quotas
• expected routine assignment/the quantitative
goal which are to be achieved in a specific period
of time.
• Is the expected performance objective.
• “A sales quota is the sales goal set for a product
line, company division, or sales representative.
Its primarily a managerial device for defining and
stimulating sales effort.” - Kotler

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• Sales forecast – is an estimate of what a firm
expect to sell
• Sales Potential – is the maximum share of the
market demand that a firm can obtain
• Sales quota – may be equal to, above or below
this.

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Significance – Sales Quotas

EVALUATE APPRAISING

CONTROL EXPENCES,PROFITABILITY

PLAN SALES
PLANS,FORECASTS,BUDGETS

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 Significance – Sales Quotas
• Motivate sales People.
• Management by exception.
• Directions to sales people’s efforts.
• Measure Individual performance.
• Self – Supervisory mechanism.

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Recruitment, Selection & Training and
Development

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 Recruitment and Selection
Turnover Strategic position analysis Job qualification
Establish
hiring Decide on the number of Job description
objectives people to hire
Identify best sources of Organizational
Planning recruitment: characteristics,
internal and external sources company image and
Recruitment Generate database of climate,
candidates styles of
supervision,
Evaluate candidates compensation, and
motivation of the
company
Selection
Select and induce candidates
Sales person’s
to accept positions desirable
characteristics
Socialization G S Sreekiran, Assistnat Professor
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Socialize
AIMS
 Training and Development
• Planned process by which knowledge, expertise,
and / or skills are transferred by an expert to
others who need them.
• Aimed at bringing in the change
• Helps one to meet their growth needs
• Improves individual success and employability
• Well orchestrated process with defined
outcomes
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Motivating and Compensating
the Sales Force

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 Selecting a Mix of Motivational Tools

• Sales manager should know each salesperson and

understand his / her specific needs
• For designing or selecting a mix of motivational tools,
a compromise between differing needs of customers,
salespeople, and the company management
becomes necessary
• Motivational tools are divided into (1) financial, and
(2) non-financial. These are shown in the next slide

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 Motivational Tools in a Motivational Mix

Financial Non Financial

• Financial compensation plan
• Salary
• Commission/Incentive
• Bonus
• Fringe benefits
• Combination
• Sales contests
• Promotion
• Sense of accomplishment
• Personal growth
opportunities
• Recognition
• Job security
• Sales meetings
• Sales training programmes
• Job enrichment
• Supervision

• Financial compensation is the most widely used tool of motivation,

as salespeople give highest value
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Professor
 Compensating the Sales force

• A good compensation plan should consider objectives from the

company’s and salespeople’s viewpoint
• Objectives of compensation plan from the company’s
viewpoint
• To attract, retain, and motivate competent salespeople
• To control salespeople’s activities
• To be competitive, yet economical: It is difficult to balance
these two objectives
• To be flexible to adapt to new products, changing markets,
and differing territory sales potentials
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 Develop the Compensation Mix

• Widely used elements of compensation mix are: (1) salaries,

(2) commissions, (3) bonuses, (4) fringe benefits (or
perquisites)
• Expense allowances or reimbursements like travel, lodging,
etc are not included
• Basic types of compensation plans are:
• Straight salary
• Straight commission
• Combination of salary, commission, and / or bonus
• 68 percent companies use combination plan and balance 32
percent firms use straight salary or straight commission

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 Straight – Salary Plan

• Characteristics:
• 100 percent compensation is salary, which is a fixed component
• No concern for sales performance or salesperson’s efforts
• This plan is suitable for sales trainees, missionary salespeople, and when
a company wants to introduce a new product or enter a new territory
• Advantages:
• Salespeople get secured income to cover living expenses
• Salespeople willing to perform non-selling activities like payment
collection, report writing
• Simple to administer
• Disadvantages:
• No financial incentive to salespeople for more efforts and better
performance. Hence, superior performance may not be achieved
• May be a burden for new andAssistnat
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 Straight – Commission (or Commission Only) Plan

• Characteristics:
• It is opposite of straight-salary plan
• Most popular commission base is sales volume or profitability
• Commission rate is a percentage of sales or gross profit
• This plan is generally used by real estate, insurance, and direct-
sales (or network marketing) industries
• Advantages:
• Strong financial incentive attracts high performance, removes
ineffective salespeople and improves results
• Controls selling costs and requires less supervision
• Disadvantages:
• Focus is on sales and not on customer relationship
• Salespeople may pay less attention to non-selling activities
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 Combination Plan

• Characteristics:
• Combines straight salary & straight commission plan
• Four types of combination plans used by companies:
1) Salary plus commission: suitable for getting improved sales and
customer service
2) Salary plus bonus: a bonus is a lumpsum, single payment, for
achieving short-term objectives. This plan is used for rewarding
team performance
3) Salary plus commission plus bonus: suitable for increasing
sales, controlling salesforce activities, and achieving short-term
goals. Also suitable for selling seasonal products like fans
4) Commission plus bonus: Not popular. Used for team selling
activities for selling to major customers
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 Combination Plan (Continued)

• Advantages:
• Flexible to reward and control sales force activities
• Security for living costs and incentives for superior performance
for salespeople
• Rewards specific sales performance
• Different plans for different sales positions / jobs
• Disadvantages:
• Complex and difficult to administer
• May not achieve objectives if not properly planned,
implemented and understood
• Indirect payment plan, also called fringe benefits or perquisites,
help in attracting and retaining people, but have now come under
government tax in India
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 Key Account Management

• 80:20 rule.
• Key accounts are companies with large
purchasing power.
• Key accounts expects the business marketing
firm to provide additional value –added
services.
• Needs key account relationship/sales
managers
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 Review

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Thank you

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